External file sharing works manually, but drag-and-drop fails with "cannot share with externals" error
We have Teams External Access configured to a restricted model ("Allow only specific external domains"). To allow file sharing in 1:1 chats with users from these authorized external domains, I ran the necessary PowerShell cmdlets to enable external file sharing globally across our environment.
The Issue: The file sharing functionality itself works perfectly, but the drag-and-drop feature triggers an error.
If a user clicks the attachment icon and manually selects the file, it uploads, and shares successfully with the external user. However, dragging the exact same file from the File Explorer directly into the Teams chat window immediately returns a blocking error stating that the file cannot be shared with externals.
This same drag-and-drop action works flawlessly for internal chats.